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Matthews Asian Growth and Income Fund
MACSX

A special meeting of the Matthews Asian Growth and Income Fund’s shareholders is expected to be held in late January 2025 for the purpose of voting on the Fund’s reorganization with the Matthews Emerging Markets Equity Fund. If approved, the reorganization is expected close in mid-February 2025. Read More

Snapshot
  • Seeks upside participation while aiming to provide some downside protection in Asia ex Japan
  • Utilize income-paying equities and convertible bonds to help mitigate downside risk and volatility
  • Offers a relatively stable means of participating in Asia’s long-term growth

09/12/1994

Inception Date

-0.67%

YTD Return

(as of 01/17/2025)

$13.25

NAV

(as of 01/17/2025)

+0.09

1 Day NAV Change

(as of 01/17/2025)

Objective

Long-term capital appreciation with some current income.

Strategy

Under normal circumstances, the Matthews Asian Growth and Income Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in dividend-paying common stock, preferred stock and other equity securities, and convertible securities as well as fixed-income securities, of any duration or quality, of companies located in Asia. The Fund attempts to offer investors a relatively stable means of participating in a portion of the Asian region’s growth prospects, while providing some downside protection, in comparison to a portfolio that invests purely in common stocks. The strategy of owning convertible bonds and dividend-paying equities is designed to help the Fund to meet its investment objective while helping to reduce the volatility of its portfolio.

Risks

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 09/12/1994
Fund Assets $245.92 million (12/31/2024)
Currency USD
Ticker MACSX
Cusip 577-130-206
Portfolio Turnover 12.0%
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region
Fees & Expenses
Gross Expense Ratio 1.15%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 12/31/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund - MACSX
09/12/1994
MACSX
0.38% -5.47% 9.99% 9.99% -2.50% 1.47% 2.85% 7.69%
MSCI All Country Asia ex Japan Index
0.19% -7.41% 12.51% 12.51% -1.19% 2.93% 4.88% 4.39%
As of 12/31/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund - MACSX
09/12/1994
MACSX
0.38% -5.47% 9.99% 9.99% -2.50% 1.47% 2.85% 7.69%
MSCI All Country Asia ex Japan Index
0.19% -7.41% 12.51% 12.51% -1.19% 2.93% 4.88% 4.39%
For the years ended December 31st
Name 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Matthews Asian Growth and Income Fund - MACSX
MACSX
9.99% 3.33% -18.43% 0.04% 16.00% 17.26% -10.96% 21.85% 1.34% -4.50%
MSCI All Country Asia ex Japan Index (USD)
12.51% 6.34% -19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90%

MSCI AC Asia ex Japan Index since inception value calculated from 8/31/94.

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

Assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund’s fees and expenses had not been waived. Performance differences between the Institutional class and the Investor class may arise due to differences in fees charged to each class.

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.

Growth of a Hypothetical $10,000 Investment Since Inception

(as of 12/31/2024)

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gain distributions or redemption of fund shares.

Yield

(as of 12/31/2024)
1.11% 30-Day SEC Yield
1.23% 30-Day SEC Yield (excluding expense waiver)
3.23% Dividend Yield

Dividend Yield (trailing) Source: FactSet Research Systems, Bloomberg, Matthews
30-Day SEC Yield Source: BNY Mellon Investment Servicing (US) Inc.

Ratings

  • OVERALL
  • out of 40 funds
  • 3 YEAR
  • out of 40 funds
  • 5 YEAR
  • out of 39 funds
  • 10 YEAR
  • out of 29 funds
  • 1 YEAR
  • 2nd
  • 16 out of 33 funds
  • 3 YEAR
  • 2nd
  • 11 out of 31 funds
  • 5 YEAR
  • 2nd
  • 15 out of 30 funds
  • 10 YEAR
  • 3rd
  • 15 out of 20 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 4 funds

Ratings agency calculation methodology

Portfolio Managers

Kenneth  Lowe, CFA photo
Kenneth Lowe, CFA

Lead Manager

Siddharth  Bhargava photo
Siddharth Bhargava

Co-Manager

Elli  Lee photo
Elli Lee

Co-Manager

Portfolio Characteristics

(as of 12/31/2024)
Fund Benchmark
Number of Positions 45 1,054
Weighted Average Market Cap $190.4 billion $180.4 billion
Active Share 74.9 n.a.
Price/Cash Flow 10.6 9.2
Price/Book 2.4 1.8
Return On Equity 18.9 15.4
EPS Growth (3 Yr) 6.8% 12.8%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 12/31/2024)
-1.97%
Alpha
0.89
Beta
76.26%
Upside Capture
89.27%
Downside Capture
-0.36
Sharpe Ratio
-0.30
Information Ratio
4.33%
Tracking Error
95.51

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 12/31/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 11.1
Tencent Holdings, Ltd. Communication Services China/Hong Kong 6.6
HDFC Bank, Ltd. Financials India 5.6
AIA Group, Ltd. Financials China/Hong Kong 4.6
Tata Consultancy Services, Ltd. Information Technology India 3.1
HKT Trust & HKT, Ltd. Communication Services China/Hong Kong 2.6
Samsung Electronics Co., Ltd. Information Technology South Korea 2.4
JD.com, Inc. Consumer Discretionary China/Hong Kong 2.4
Yum China Holdings, Inc. Consumer Discretionary China/Hong Kong 2.4
Midea Group Co., Ltd. Consumer Discretionary China/Hong Kong 2.1
TOTAL 42.9

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: BNY Mellon Investment Servicing (US) Inc.

Portfolio Breakdown (%)

(as of 12/31/2024)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 24.6 27.2 -2.6
Financials 19.9 22.0 -2.1
Communication Services 14.4 10.2 4.2
Consumer Discretionary 11.6 14.0 -2.4
Industrials 9.3 7.4 1.9
Real Estate 7.1 2.2 4.9
Consumer Staples 4.9 3.9 1.0
Health Care 3.4 3.5 -0.1
Materials 3.2 3.7 -0.5
Utilities 1.8 2.7 -0.9
Energy 0.0 3.2 -3.2
Liabilities in Excess of Cash and Other Assets -0.1 0.0 -0.1

Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.

Country Fund Benchmark Difference
China/Hong Kong 37.5 36.1 1.4
India 17.1 21.9 -4.8
Taiwan 15.8 22.1 -6.3
South Korea 8.7 10.2 -1.5
Singapore 6.6 3.9 2.7
Thailand 3.4 1.6 1.8
France 2.9 0.0 2.9
Philippines 1.7 0.6 1.1
New Zealand 1.7 0.0 1.7
Macau 1.6 0.1 1.5
United States 1.6 0.0 1.6
Indonesia 1.4 1.7 -0.3
Malaysia 0.0 1.7 -1.7
Liabilities in Excess of Cash and Other Assets -0.1 0.0 -0.1

Not all countries are included in the benchmark index(es).

Asset Type Fund
Common Equities and ADRs 90.5
Convertible Bonds 9.5
Liabilities in Excess of Cash and Other Assets -0.1
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 58.6 63.5 -4.9
Large Cap ($10B-$25B) 12.8 20.5 -7.7
Mid Cap ($3B-$10B) 18.2 15.5 2.7
Small Cap (under $3B) 10.5 0.5 10.0
Liabilities in Excess of Cash and Other Assets -0.1 0.0 -0.1

Source: FactSet Research Systems.

Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Distributions

Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Short Term
Capital Gains
Long Term
Capital Gains
Total Distributions
Per Share
% of NAV Nondividend Distribution (Return of Capital)
12/17/2024 12/18/2024 $0.12099 $0.00000 $0.00000 $0.12099 0.9% N.A.
06/25/2024 06/26/2024 $0.34750 $0.00000 $0.00000 $0.34750 2.6% N.A.
12/13/2023 12/14/2023 $0.17871 $0.00000 $0.00000 $0.17871 1.5% N.A.
06/27/2023 06/28/2023 $0.16500 $0.00000 $0.00000 $0.16500 1.3% N.A.
12/13/2022 12/14/2022 $0.13141 $0.00000 $0.41241 $0.54382 4.1% N.A.

 

There is no guarantee that the Fund will pay or continue to pay distributions. 

Past performance is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost.

Commentary

Period ended December 31, 2024

Market Environment

  • The Asia region fared well in 2024 amid divergent trends between markets. Changing expectations for U.S. interest rates and a fluctuation in the U.S. dollar were big influencers as was the ongoing strength in the artificial intelligence (AI) space.
  • After a strong start, India’s market experienced a selloff when Prime Minister Modi failed to win a majority in the elections in June, but equities quickly recovered after Modi secured a ruling coalition with allies. Later in the year, the market experienced a small correction as economic expansion eased and there was a downgrade in earnings, particularly in the consumer space.
  • Taiwan’s market powered through the year thanks to demand for its AI chips while South Korea was one of the biggest underperformers in emerging markets amid softening demand in the auto sector and a cyclical downturn in segments such as heavy industries. The market also experienced volatility after South Korea’s president briefly imposed martial law and then was impeached.
  • Chinese equities had a volatile start to the year and then rallied through the spring helped by government initiatives to support the property sector. The market sagged through the summer before surging in September as the government unveiled a broad package of stimulus measures aimed at kickstarting a recovery in the real estate market, lifting consumer confidence and improving liquidity in the stock market.
  • In Southeast Asia, domestic demand showed signs of recovery. Several economies including the Philippines benefited from domestic infrastructure agendas while some markets gained from specific trends, such as demand for AI related-date centers in Malaysia. In the second half of the year, the region’s performance was impacted by signs that the Federal Reserve may cut rates more slowly than anticipated and by a strengthening dollar.

Contributors and Detractors

  • For the year ended December 31, 2024, the Matthews Asian Growth and Income Fund returned 9.99%, (Investor Class) and 10.09% (Institutional Class) while its benchmark, the MSCI All Country Asia ex Japan Index, returned 12.51% over the same period.
  • On a country basis, the top three contributors to relative performance were South Korea due to an underweight allocation, the U.S. due to an off-benchmark allocation and India due to stock selection. The top three detractors were China/Hong Kong due to stock selection, France due to an off-benchmark allocation and Singapore due to stock selection.
  • On a sector basis, the top three contributors to relative performance were industrials, materials and information technology (IT) due to stock selection. The top three detractors were financials due to stock selection, real estate and consumer staples due to an overweight allocation.
  • The top three contributors to absolute performance during the year included Taiwan Semiconductor Manufacturing Company (TSMC), a leading Taiwanese chipmaker, Tencent Holdings, a Chinese online gaming and social media conglomerate, and Broadcom, a U.S. semiconductor and software solutions provider. The largest detractors included Samsung Electronics, a South Korean semiconductor and consumer electronics maker, Chailease Holding, a Taiwanese financial services provider, and AIA Group, a pan-Asian life insurer.

Outlook

  • A key narrative for the region in 2025 could be the scale of the impact of the new Trump administration. Its policies could support a higher dollar, U.S. Treasury yields and interest rates and it could also impose tariffs on countries including China. At the same time, a Trump administration could also stoke a stronger U.S. economy and that’s good for global growth and for risk assets.
  • After the first quarter, provided there is more clarity on U.S. trade policy as well as from China on its fiscal plans to boost its lackluster economy and real estate sector, we think volatility may subside and the outlook for the region will improve. Taiwan should continue to benefit from strong demand for AI-related chips while in India we are focused more on financials, large caps and companies with consistent earnings growth where expectations aren’t so high.
  • At the global macro level, we will likely continue to see Fed rate cuts. This may not be a clear tailwind for Asian emerging markets but will be less of a headwind, in our view. At this juncture, we would say that a large component of returns from the region in 2025 will be backloaded into the second half of the year.


Top 10 holdings as of December 31, 2024. Current and future holdings are subject to change and risk.

 

Average Annual Total Returns - MACSX as of 12/31/2024
1YR 3YR 5YR 10YR Since Inception Inception Date
9.99% -2.50% 1.47% 2.85% 7.69% 09/12/1994

All performance quoted is past performance and is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund's fees and expenses had not been waived. For the Fund's most recent month-end performance visit matthewsasia.com

Fees & Expenses
Gross Expense Ratio 1.15%
Yields as of 12/31/2024
30-Day SEC Yield 1.11%
30-Day SEC Yield (excluding expense waiver) 1.23%
Dividend Yield 3.23%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 12/31/2024, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. The 30-Day SEC Yield should be regarded as an estimate of the Fund’s rate of investment income, and it may not equal the Fund’s actual income distribution rate. Source: BNY Mellon Investment Servicing (US) Inc.

Dividend Yield (trailing) is the weighted average sum of the dividends paid by each equity security held by the Fund over the last 12 months divided by the current price as of report date. The annualised dividend yield is for the equity-only portion of the Fund and does not reflect the actual yield an investor in the Fund would receive. There can be no guarantee that companies that the Fund invests in, and which have historically paid dividends, will continue to pay them or to pay them at the current rates in the future. A positive distribution yield does not imply positive return, and past yields are no guarantee of future yields.

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.

 

Visit our Glossary of Terms page for definitions and additional information.

Index Definitions

The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Neither the funds nor the Investment Advisor accept any liability for losses either direct or consequential caused by the use of this information.

The views and opinions in the commentary were as of the report date, subject to change and may not reflect current views. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the managers reserve the right to change their views about individual stocks, sectors, and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. It should not be assumed that any investment will be profitable or will equal the performance of any securities or any sectors mentioned herein. The information does not constitute a recommendation to buy or sell any securities mentioned.